Quick question regarding price

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Whats stopping the banks to start trading xrp btween each other and descide the price will be 1 million each..thus cutting out xrapid and the exchanges and using that as their own form of cross border transactions?﻿ that intern wouldnt affect the market price or the liquidity since they have been stocking up otc...

Edited November 30, 2018 by Shuz

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Whats stopping the banks to start trading xrp btween each other and descide the price will be 1 million each..thus cutting out xrapid and the exchanges and using that as their own form of cross border transactions?﻿ that intern wouldnt affect the market price or the liquidity since they have been stocking up otc...

If they were to do that, then it essentially would be a messaging system instead of actual settlement. They would just be keeping track of who paid who what in proportion to some arbitrary baseline value. The thing that makes XRP powerful is the ability to settle payments in 5 seconds. This is possible only when XRP has an independent free floating value, and can be exchanged at that valuation in many places.

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Whats stopping the banks to start trading xrp btween each other and descide the price will be 1 million each..thus cutting out xrapid and the exchanges and using that as their own form of cross border transactions?﻿ that intern wouldnt affect the market price or the liquidity since they have been stocking up otc...

Wouldn't they have to get legal documentation on that 1 million valuation between the two banks? Or else one bank could scam the other. What if the bank wants to exchange with 2 or 3 other banks? Wouldn't that require separate agreements with each of the other banks? Seems like a PITA when all banks could just use xRapid as is.

Don't think you've thought this through, but if you have, provide more detail on how it would work to short cut xRapid usage at a lower cost.